The entire credit and collection world will more than likely be turned upside down starting in 2014. If you’re a creditor in any industry from banking to healthcare, pay close attention. New rules on how you do business are coming your way, and soon.
The Consumer Financial Protection Bureau (CFPB) will be issuing their new rules for credit and collections some time during the first half of 2014. It’ll affect every person and every business of any kind in the credit and collection industry. Creditors who were excluded from the Fair Debt Collection Practices Act of 1977 will be front and center this time. Everyone, let me repeat, everyone in the credit cycle will be included either initially or eventually. This will ultimately include hospitals, and large and small medical practices.
The Advanced Notice of Proposed Rulemaking (ANPR) from the CFPB came out on November 6 and allowed for a 90 day period of comment from consumers, creditors, collectors, vendors, collection attorneys, government officials, or anyone else in the United States wanting to be a part of the discussion and public record.
I would suggest that you peruse this link from the CFPB as soon as possible.
It’s 114 pages long. My suggestion would be to first take about 10-15 minutes to look to see how it’s organized and what type of questions are asked. One thing you’ll notice are some very good questions that encompass most all of the issues of the credit and collection industry. I’d give the CFPB an A on the questions. It demonstrates that they’ve done a good job identifying issues. Of course the concern will be the answers to these questions, and thus the rules. Some of my concerns are:
Will the answers make sense for all parties involved?
What will be the cost and complexity of the regulation and the true cost to the consumer?
Will credit accessibility be compromised by new regulation?
After the initial 90 day comment period is over, will the CFPB take the necessary time to fully vet the rules to all parties affected?
Most importantly, will the CFPB provide the leadership to have just one set of rules for creditors and collectors to help eliminate frivolous lawsuits, make compliance accomplishable and sensible, and enforcement fair and centralized?
The CFPB has a huge opportunity to simplify the credit and collection industry by its actions. The CFPB’s power is unprecedented, and the oversight is limited. My prayer is that they seize the moment and make it right. I do believe that people should pay their just debts. I also believe that everyone at every level should be treated compassionately and with dignity and respect.
If you’re a creditor and a member of a trade association, please forward the link to your trade association and ask them to coordinate their comments from their members and forward to the CFPB. Link: http://files.consumerfinance.gov/f/201311_cfpb_anpr_debtcollection.pdf
Martin Sher, Co-CEO of AmSher Collection Agency and a past president of ACA International, is the author of the Collector’s Pledge. Hundreds of thousands of collectors all over the world have signed this unique document committing to treat people with dignity and respect. AmSher is known as the collection agency that collects with compassion.